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Bloomberg
Saudi Arabia’s equities index extended a winning streak to five sessions on Sunday, following another positive week for crude prices.
The Tadawul All Share Index climbed 0.9%, with gauges in Bahrain, Oman, Kuwait, Qatar and Israel also rising. The index in Dubai finished little changed while and Egypt’s EGX 30 declined 0.9%.
Oil, the main export for Gulf countries, posted its third straight weekly rise on improving demand, with the International Energy Agency (IEA) warning the market will need extra supply next year. Brent crude futures rise 1.1% for the week that ended June 11 to $72.69 per barrel, the highest since April 2019.
As Saudi stocks keep rising, a technical measure shows the Tadawul All Share Index has been trading in overbought territory for the past two weeks. The gauge is up about 25% for the year, versus a 7% advance for the MSCI Emerging Markets Index.
Israel’s stock market index rises as much as 0.9%, heading for its third day of increases. The index is up 14% this year.
While the MSCI Emerging Markets Currency Index rises 0.2% last week, the fourth consecutive week of increase, Saudi Arabia’s Al Rahji Bank climbed 0.9% to the highest since April 2006. Dur Hospitality rises 0.6% while Taiba Investment ended little change
Saudi’s hospitality firms weigh $2.4bn merger
Taiba Investment Co and Dur Hospitality Co are in talks to combine their businesses, potentially forming a company with a market value of about $2.4 billion in Saudi Arabia’s real estate, hospitality and investment industry.
Taiba, which has a market capitalisation of 5.5 billion riyals ($1.5 billion), operates as an investment company in sectors ranging from real estate and tourism. Dur, valued at 3.5 billion riyals, is mainly focused on operating resorts, housing compounds, and restaurants in Saudi Arabia. Assilah Investment is the top shareholder in both companies.
Opening up to tourism is a key plank of Saudi Arabia’s plans to diversify its economy. The kingdom’s plans include the Red Sea Development, which will oversee a luxury tourism zone equivalent in size to Belgium, an entertainment hub near the capital, and a new city in the north-west called Neom that’s expected to cost $500 billion to build.
Taiba and Dur said the discussions are preliminary and may not lead to a combination. The Public Investment Fund (PIF) holds stakes in both companies and is part of a push to get firms to combine, creating bigger and more efficient entities.